The U.S. beverage industry has paid more than $1.4 billion in aluminum tariffs since 2018, when Section 232 was implemented, according to a study shared today by the Beer Institute (BI).
Section 232 of the Trade Expansion Act, imposed by former president Donald Trump, placed a 10% tariff on imported aluminum.
In the past four years, those tariffs have “driven up the price of aluminum” as rolling mills and smelters have included the tariffs in their prices, “regardless of whether the metal was meant to be tariffed based on its content or origin,” the BI wrote in a press release. As a result, the majority of those payments (92%) have gone to those suppliers, rather than the U.S. Treasury, according to a report by consulting firm Harbor Aluminum, on behalf of the BI.
The U.S. beverage industry paid $1.416 billion in tariffs on 7.1 million metric tons of aluminum from March 23, 2018, to February 28, 2022, according to Harbor. Of that, $11 million (8%) went to the U.S. Treasury, while $1.305 billion (92%) went to U.S. rolling mills and smelters and Canadian smelters.
In 2021, U.S. beverage companies paid $463 million in Section 232 tariffs, $15 million (3%) of which went to the Treasury, and $448 million (97%) went to mills and smelters.
“This new research shows the tariffs on aluminum continue to push up prices on American consumers and businesses,” Jim McGreevy, president and CEO of the BI – who will step down from his role in May – said in a press release. “The fastest way to alleviate these high prices on American businesses and families is to repeal the tariffs.”
Ending the 10% aluminum tariff is a top federal affairs priority for the BI in 2022.
The trade association commissioned a 2018 study that estimated Section 232 would increase the annual cost of beer manufacturing by $347 million. More than 74% of all beer produced in the U.S. is packaged in aluminum cans and bottles, with brewers bringing in 41 billion aluminum cans and bottles in 2020, according to the BI.
President Joe Biden has replaced tariffs on European and Japanese steel with a tariff rate quota system – in turn removing nearly half of the imports listed in Section 232 – but he has not announced any plans to change the aluminum tariff, according to the BI.